B166772 RELEASED Y0) JUM 1 2 1970

Dear Senator Allott:

Further reference 1s made to your letter of December 3, 1969, whrch transmitted a letter from Mr. Fred Beeman, Transportation Chairman, Local No. 436, United Federation of Postal Clerks, Pueblo, . Mr. Beeman expressed concern that (1) moving more marl into "national transportation centers" such as and bypassing sectional center offices such as Pueblo could cause delays in mall deliveries and (2) Trans Central Airlines had several flights in and out of Pueblo dally but that very little mail was being transported on these flights. He also requested lnformatlon on the costs for varzous modes of transportation used by the Department to move the marl.

Also, we obtained from a Post Offace Department official a copy of a letter to you dated January 6, 1970, from the Department responding to your request for its comments on the issues raised by Mr. Beeman.

In response to Mr. Beeman's questlons, we revlewed pertinent records and held discussions with offlclals at the Department Headquarters in Washington, D.C., the Department's Denver Reglonal OffIce, and the Denver and Pueblo, Colorado, post offaces. . We believe that the lnformatlon furnished you In the Department's letter of January 6, 1970, 1s factual. The results of our review are summarized below and are presented in greater detail In the enclosure to th1sl.e~~

--Department offlclals said that routing mall through national trans- portation centers, such as Denver, had not resulted In delays in mall dellverles.

-The Department, in arranging transportation schedules, considers mall volume, locations, drstance, and avallablllty of transporta- tlon services. Whenever possible and economically feasible, the Department provides for direct routing of mall between sectronal center facllltles, between such facllltles and associate posf offlces, and between associate post offices to avoid delays. --At the time of our revrew (March 1970) Trans Central Arrllnes did not have, and had not requested, the required authority from the C+vil Aeronautics Board to carry mall on its scheduled flights B 166772

servmg Pueblo. A Department official advised us that existing hlghway truck routes and another alrlane (Frontier Alrllnes) serv- ing Pueblo provided adequate mall service*

-Average costs per mile of transporting marl on highway truck routes and the costs per ton-mile of transporting marl on air tax1 and commercial airline routes in the State of Colorado were generally higher than the costs cited by Mr. Beeman.

-The "letter of policy" mentioned in Mr. Beeman's letter outlines certain pollcles and guldellnes for the dlstrrbutlon and delivery of mall in the Denver Postal Region, with the objectives of reduc- ing major fluctuations In work loads, reducing costs, and lmprovlng working condltlons. We believe that these are desirable obJectives and, as indicated by Mr. Beeman ln his letter, are "a step in the right dlrectlon."

We have not requested the Department to review or formally comment on the lnformatlon in this report. The Department 1s being notified of the release date and general subject matter of this report. We trust that the lnformatlon furnished will be helpful. Sincerely yours%

Comptroller General k of the

Enclosure

The Honorable Gordon Allott ENCLOSURE Page 1 GENERAL ACCOUNTING OFFICE

EXAMINATION INTO CERTAIN ASPECTS OF MAIL TRANSPORTATION IN DENVER, COLORADO, POSTAL REGION POST OFF1 CE DEPARTMENT

ROUTING ‘OF MAIL THROUGH “NATIONAL TRANSPORTATION CENTERS”

In his letter of November 22, 1969 (see p. 81, to Senator Gordon Allott of Colorado, Mr. Fred Beeman, Transportation Chalrman, Local No. 436, United Federation of Postal Clerks, Pueblo, Colorado, requested assistance in obtaln- lng the reasons for routing more and more mall through “national transportation centers,” such as Denver, Colorado, and expressed concern that such routing and star route trucks bypassing sectlonal center offices could cause delays In mall deliveries.

The mall transportataon and dlstrlbutlon system being used by the Post Office Department consists of a network of sectlonal center facllltles, yr large post offlces, serving as focal points through which mall flowing bet,ween smaller post offlces --associate post offices--1s routed. Each sectional center serves a designated geographic area In establishing transportation routlngs, eonslderatlon 1s given to the volumes of mall moving between post offlces and the availablllty of existing transportation facllltles such as air, train, and highway services. This system permits sufficient quantltles of mall to be gathered and economically processed in one geograph>c area and transferred to another geographic area where the ma1 1 1s redlstrlbuted to destination post offices. The ultimate goal of this system 1s to move the largest volume of mail in the least amount of time and at the least cost:

A Department offlclal informed us that mall was routed directly between associate post offlces when routing through a sectional center would result in delays in mall dellvery. For example, ma1 1 1s routed dlrec t ly between Trlnldad, Colorado, and Raton, New Mexico, a distance of about 22 miles. If this mall were routed through the two sectlonal centers serving these associate post offlces, it would be transported a distance of about 406 miles.

The Department has unofficially designated certain cities throughout the Unl ted States , lncludlng Denver , as national transportation centers because of thexr importance as rail and air transportation centers and the avallablllty of manpower and equipment needed to handle large volumes of mall. Each transporta- tlon center usually serves an entire State. Denver, for example, serves Colorado. Mall addressed to Colorado from other States 1s transported to the Denver Trans- portatlon Center , sorted, and routed to its destlnatlon. Similarly, mail for other States originating in Colorado is consolidated at the Denver Transportation Center for shipment to the transportation centers In other States.

Reglonal postal offlclals informed us that, where feasible, transportation schedules for the Denver Postal Region included routes that bypass a transporta- tion center to avoid delayb In mall delxverles. For example, mall 1s transported ENCLOSURE Page 2

twice dally on a highway star route from Dallas, Texas, to Pueblo, Colorado. One truck, carrying preferential mall for Pueblo, 1s scheduled to arrive In Pueblo at 3:15 a.m. to permit dellvery to the addressees the same day. Preferential mall can include newspapers and magazines, special-delivery, special-handling, and first-class mall; and alrmall. On this trip, alrmall and first-class mall are not Included. A second truck, leaving Dallas and carrying nonpreferential mall, 1s scheduled to arrive at the sectional center rn Denver at 4 30 p m. (This second trip 1s the one mentioned in Mr. Beeman’s letter of November 22, 1969.1 After processing at the Denver Sectional Center this marl 1s transported to Pueblo by any one of several star route trucks, all of which arrive in Pueblo ln time for delivery the next day.

If the second truck from Dallas stopped in Pueblo, enroute to Denver, It would arrive at Pueblo at about 1 p.m. The local mall would remain undelivered until the following day because mall carriers usually have left the post office by that time to make deliveries on their routes. Also, stopplng In Pueblo at 1 p.m. to pick up mall for delivery to Denver would not expedite delivery service because there are at least three exlstnng local star route trips from Pueblo to Denver which leave Pueblo at 5 p.m. or later and carry mall In time for delivery in Denver the next day and there 1s one star route trip which meets Denver’s out- going dispatch schedule for destlnatlons beyond the Denver Sectlonal Center de- livery area. The later departure times from Pueblo result in more mall making * ‘, next-day dellvery at Denver.

As of October 31, 1969, direct routing of mall was provrded by 42 hrghway star routes between sectlonal centers, 63 such routes between sectional centers and associate post offices , and 200 such routes between associate post offices.

It appears that the Department’s transportation scheduling for moving mail among locations gives conslderatlon to volumes, locations, distance, and availa- blllty of transportation modes and that, whenever possible and economically feasible, efforts are made by the region to avold delays in mall delivery.

USE OF AIR CARRIERS TO TRANSPORT MAIL IN DENVER POSTAL REGION

Mrb Beeman stated in his letter that some airlines did not carry mail on a regular basis, for example, Trans Central Alrllnes had several flights dally In and out of Pueblo, Colorado, but it was his understandlng that very lrttle mall was being carried on these flights.

We noted that, at the time of our review, Tram Central Airlines did not have the required authorlzatlon from the Clvll Aeronautics Board to carry mall on its flights serving Pueblo and had not requested such authority.

Department offlclals informed us that national “first-level” and reglonal “second-level” airlines were authorized to carry airmail and first-class mall on all scheduled flights; however, “thlrd-level’8 carriers--small local airlines such as Trans Central--must obtain the approval of the Clvll Aeronautics Board ENCLOSURE . Page 3

to carry mail. The Clvll Aeronautics Board will authorize a third-level carrier to carry marl between two points only If (1) no national or regional airline has scheduled flaghts between the two points or (2) a national or regional airline has scheduled flights between the two points but 1s unable or unwilling to pro- vide the service needed by the Department.

We were informed also that exlstlng mall transportation service to Pueblo, including the use of several hlghway star routes and a reglonal alrllne (Frontier Airlines), was adequate. In this connection, we noted that, during the period from October 4 through October 10, 1969, eight scheduled flights of Frontier Airlines were used one or more times to carry mall to or from Pueblo.

Thus, it appears unlikely that Trans Central would be able to obtain authorl- zatlon from the Clvll Aeronautics Board to provnde airmall service to Pueblo.

In December 1968 Trans Central was authorized by the Civil Aeronautics Board to transport alrmail between Denver and Trinidad, Colorado, between Denver and Raton, New Mexico, and between Raton and Albuquerque, New Mexnco. According to the Civil Aeronautics Board order, no national or regional airlines had scheduled flights on any of these routes. We were informed by Department offlclals that subsequent changes In the schedules of Trans Central’s flights over these routes made the service less advantageous to the Department and that, as a result, Trans Central has not been used extensively for carrying mail

We were Informed also that Trans Central began carrying mall on Its flights between Denver and Trlnldad and from Raton to Albuquerque in January 1969, how- ever, the service between Denver and Trlnldad was dlscontlnued in May 1969, and no mall had been carried on Trans Central flights between Denver and Raton be- cause the Department determlned that better mall servl’ce could be provided between these points by hlghway star routes.

At the time of our review, seven air tax1 mall routes were being admlnlstered by the Denver Postal Region, as follows:

1. Pueblo, Colorado, to Dodge City, Kansas 2. Cedar City to Provo, Utah 3. , Moab-Price-Provo to Salt Lake City, Utah 4. Newcastle-Wheat land to Cheyenne, Wyoming 5. Sheridan to Casper, Wyoming 6. Rock Springs-Rawllns to Cheyenne, Wyoming 7. Rlverton-Worland-Casper-Cheyenne, Wyoming, to Denver, Colorado.

Denver Regional Office records showed that Trans Central had submltted a bid on only the four Wyoming air tax1 mall routes. Trans Central’s bids on the Wyoming routes were substantially higher than those of the air taxi operators who were awarded the routes. A Department offlclal informed us that Trans Central had been offered the opportunity to submit bids on all seven routes. We noted that Trans Central’s name appeared on the Denver Reglonal Offlce list of prospective bidders for air tax1 mall service. ENCLOSURE Page 4

We noted in addition that, during the period from October 4 through October 10, 1969, about 60,000 pounds of mail were carried on 44 scheduled commercial airline flights operating in the Denver Postal Region, including the eight Frontier Air- lines flights serving Pueblo.

Because of the large number of commercial airline, air taxi, and highway star routes in the Denver Postal Region, it was impracticable for us to deter- mine whether the most economical and expeditrous mode of transportation was used in all cases. However, in view of the large volume of mail carried by commercial airlines during the period from October 4 through October 10, 1969, it appears that the Department has been using commercial airllnes to a large extent in the Denver Postal Region. AVERAGE COSTS OF TRANSPORTING MAIL ON STAR ROUTES AND AIRMAIL ROUTES SERVlNG COLORADO

We computed the average costs per mile as of October 31, 1969, of transporting mai 1 carried by highway star routes and air taxis, serving the State of Cglorado. We also computed the average costs per ton-mrle for the month of October 1969 for transporting mail on one 'air taxi route serving the State. We obtained from the Department data on nationwide average costs per mile of transporting mail on high- way star routes and air tax1 mall routes, and costs per ton-mile for mail carried by commercial airllnes The following tabulation provides a comparison of the costs per mile for highway star routes and air tax1 mall routes serving the State of Colorado with the nationwlde average costs per mile for such routes as of October 31, 1969. Costsper mile (in cents) State of National Colorado average Highway star routes. Between sectional centers 24 26 30.00 Between sectional centers and associate post offices 20.38 27.62 Between associate post offices 20,63 23.57 Average for all star routes 22.30 27.56 Air tax1 mail routes'

Pueblo, Colorado, to Dodge City, Kansas 30.95) Riverton-Worland-Casper-Cheyenne, 1 46.17a Wyoming, to Denver, Colorado 43.01) aAs of November 6, 1969 ENCLOSURE Page 5

The cost of air tax1 mall routes on a ton-mile basis would vary considerably depending on the contract cost per mile and the quantity of mall carried over a given route on a particular trip. For example, the ton-mile cost of the Pueblo, Colorado, to Dodge City, Kansas, air tax1 mall route varied from $1.78 to $14.74 during the month of October 1969. The average cost per ton-mile for the month of October 1969 was $2.64.

The rates paid by the Department for the transportation of alrmall and first-class mall by scheduled commercial airlines are established by the Clvll Aeronautics Board. These rates Include a line-haul charge based on the ton- ml les of mall flown and a terminal charge on a per-pound basis to cover the costs of loading ma1 1 onto, and unloading mall from, the aircraft. Clvll Aeronautics Board Order 70-4-9, dated April 2, 1970, revised the rates for airlifting first- class and other nonprlorlty mall. The revised rates were retroactive to April 6, 1967, the date the Department lnltlally petitioned the Clvll Aeronautics Board for revised nonpriority mall rates (Civil Aeronautics Board Docket 18381). Fol- lowing 1s a schedule of the rates paid by the Department for air transportation of airmall and first-class mall before and after April 6, 1967. These rates apply to all mall transported by commercial airline within the 48 contiguous States and the District of Columbia and between such locations and certain points in Alaska, Hawall, Guam, and Puerto RICO.

Line-haul Terminal rate per rate per ton-ml le pound (note a) - (cents) Airmail (these rates have not changed) 24 r 2.34 to 9.36

Firs t-class mall. Prior to April 6, 1967 15.12 1.66 to 16.61 April 6, 1967, to June 30, 1969 10.98 2.34 to 9.36 On and after July 1, 1969 11.33 2.34 to 9.36

aThe rate paid depends upon the rate classlficatlon of the airport of departure.

The average cost per ton-mile, zncludlng terminal handling charges, for mall transported by commercial airlines in the continental Unlted States during fiscal year 1969 was 30.15 cents for airmail and 21.20 cents for first-class mail.

The average costs per mile of transporting mall on highway star routes and the average costs per ton-mile for air tax1 and commercial alrline routes in the State of Colorado, as presented above , were generally higher than those costs cited by Mr. Beeman in his letter. ENCLOSURE Page 6

"LETTER'OF POLICY"

The letter of policy mentioned in Mr. Beeman's letter IS a memorandum, dated October 29, 1969, from the Department’s Denver Regional Offlce to the postmasters of all first- and second-class post offrces in the Denver Postal Region, whrch outlines changes rn certain pollcles and guldelrnes for the dlstrlbutlon and delivery of marl in the Denver Postal Region. The memo randum stated that the primary purposes of the changes were to (1) level the work load by reducing maJor fluctuations ln dally work load, (2) cut costs by reducing overtime and other premium pay, and (3) improve employee working condltlons by provldang more daylight tours and reducing mail dlstrlbutlon scheme requrrements. The memorandum speclflcally called to the attention of the postmasters the Department’s new system for processing first-class letter-size mall, referred to as “Programmed Dlstrlbutlonl’ or "Operation Bypass," which was implemented nationwide in five phases during the period from February 7, 1970, through May 2, 1970.

The concept of Programmed Dlstrlbutron, according to the Department,

cl* * * involves ldentlflcatlon of stated first-class letter mall [marl destined for delrvery in a particular State] at origin of- flees which will be airlifted to dlstrlbutlon points in destrnatlon states beyond the range of overnight delrvery.‘O

At the orrglnatlng post offices, the second sorting of outgoing first-class letter marl was eliminated except for intrastate mall. This second sorting 1s now performed at the designated distributron points in the destination States.4 I

The program IS designed to maxrmlze the use of letter-sorter machines at the national transportation centers by moving a part of the sorting operation now performed at sectaonal center facrlitles to transportation centers A Department summary of the program stated that leveling of work loads should result . According to a Department offlclal, the program also would reduce the need for post offices to hold mall destined for other States for several hours to accumulate a volume sufflclent to warrant the second sort, a maJor problem inherent in the former system. This accumulation of mall caused most mall to be dispatched at the same time. As a result, airlines and star route trucks frequently were unable to carry all mall being dispatched during peak periods and, therefore, mall was delayed until later flights or star route trips. It appears that the new system will allow for improved use of air carriers and highway star routes.

In his letter Mr. Beeman expressed concern over the desired leveling of the sectional center work load and better use of highway star routes and air carriers. The letter of policy referred to by Mr. Beeman deals directly with his concern about leveling the work load. ENCLOSURE Page 7

According to a Department official , sorting mail at dlstrlbutlon points in destination States rather than at the point of mailing will save money, level the work load, and allow more effective use of transportation facllltles. These purported results appear to be in conformance with Mr. Beeman’s desires as stated in his letter. ENCLOSURE Page 8 Colorado Federation of Postal Clerks Affrlratod Wbth AFL - Cl0 Nomhtr 22, 1969

Senator Gordon Allott U. S. Senator Senate Offios Bldg. Washington, D.C. Dear Senator Allott: I would like to request your assxstance in obta,nxny: the reasons as to why the pattorn of tranqortatzon for the Post Office 1s to channel more and more mall into National Iransportatxon Centers, such as 0enver. It seems that the nore mall mowed xnto these centers, the greater ghanoe for delay. Another tlane, what is the reason for some of tine larger star route trucke bypassmng sectIonal center offxes, example: Denver to Alas, used to arrxve M-APueolo at 1 P.M. ana tie return was at 8 A.M*, they now by-pass henlo and the mail 1s hauled into Denver and then tntcked back downto %blo,

‘Ihero are some axrlinos that do not carry maA on a re,gd.ar basis, for e:rample, Trans-Central has several flights In and out of Pueblo daxly, and it ia our understanding that very little mail is being transported on these flights, Ire would Wee to know about tne costs and WA to knozt If theso fi@ros are correct: Average cost Star Route, 2G# per rmla---when m~nxmumWage 3a paid JOg per rmle Ml1 be the cost---small star routes from sectLo&. centers or assomate offwes, prasent~~ 199 por rmle---air ta& 39f~ per ton mle---comerczal. aLr carrier3 246. par ton m3.l.e. \!e have recently rece?ved a letter of polxcy on dx&mbutLon of Lncolmng and outgoIng mails (all classes), thy is a step 1n the rqht &rectLon. Your assxstance m furthur~~xq improvemnt of the mail service by bettir utilization of the &r carrrers and Star routes &at are now in OpentiOA w2.U. be greatly appreciated, Perhaps a more even flow of mail Znto our Sectional Center offices will help to i@Oment the above IWAtiOACbd pO~ooY, Fraternally,

&ecl Beokn* Transportation QIsurmen Local. ,:41$, U.F.B.O@ 2707 Xithers Pueblo, Colo=do